Education Matters For Mortgages
Everyone has heard the old adage that knowledge is power. This is especially true when it comes to finances, home buying, and building wealth. This sentiment seems to be shared across many segments of society. In fact, each year there are countless op-eds written about how high schools should teach personal finance. Whether you believe that school curricula should include this type of material is a whole different conversation. What is important is that there are many in America that feel like they are not educated about things like the home buying process. Recent studies conducted by Fannie Mae show that many consumers wish they had more education about how to become a homeowner. At Peoples Choice Mortgage, we definitely agree. The home buying process is complicated and education often means the difference between just any old mortgage broker and a true professional.
The Best Mortgage Brokers are Educators
The best mortgage brokers are not salespeople. They are educators. Our job is not to sell you a mortgage product. Rather, it is our job to assess your goals, analyze your financial picture, and then introduce you to mortgage products that might fit your needs. At the same time, it is up to us to give you the information you need during all of these steps to make a decision that is right for you. One of the key barriers that prevents renters from becoming first-time home buyers is education. Here are some of the things that first-time home buyers should be getting educated about from their mortgage brokers:
Home Buying Budgets
Creating a budget for buying a house has a lot more to it than merely how much you will pay for a house. Home buyers need to plan for closing costs, house insurance, property taxes, and possibly mortgage insurace. All of these items need to be budgeted for on top of mortgage payments. One of the key things we try to explain to all of our clients, especially first-time home buyers, is that it is important to priortize affordability. It does not matter what mortgage rate you are getting or how much your down payment is if you cannot afford it all. The only way to know if buying a house is affordable is to account for every cost that you will experience from buying a home.
Down Payments
Many people live with the false assumption that you need a 20 percent down payment to buy a house. This is a myth. The truth is that there are many mortgage products and government programs that allow you to put down much less as a down payment. Exceptional mortgage brokers have a large network of lenders that have their own requirements for a mortgage. Some lenders are much more lax with the size of a down payment that is required. Additionally, certain programs, such as FHA loans, VA loans, or USDA loans can require a small down payment or even no down payment.
While there are many programs that allow you to make a smaller down payment, there are some benefits to making a larger down payment. For instance, making a 20 percent down payment for a lot of mortgage products means you will not need mortgage insurance. Home loans are not a one-size-fits-all type of financial instrument. Different products and different programs are better for different situations. You want a mortgage broker who will educate you about all of these options and to help you decide if one is right for you.
Government Backed Mortgage Programs
The federal government has a myriad of programs that are designed to help Americans stop renting and become homeowners. This is especially true for first-time home buyers. There are FHA loans, VA loans, and USDA loans. All of them have different requirements and their own unique benefits. Your mortgage broker should educate you about all of these options. For some, a conventional mortgage might be a better option. For others, these government backed programs are the best route to become homeowners. Again, everybody’s situation is different. A great mortgage broker will suggest programs that are right for you and will give you all of the facts so that you can make the best decision possible.
Final Thoughts
Buying a house is a very complicated process, so is the process of getting a home loan. This is especially true for first-time home buyers who have never gone through this process before. Truly fantastic mortgage brokers prioritize educating their clients so that this complicated process is demystified. Our job at Peoples Choice Mortgage is to give you all the knowledge you need so that you can feel confident in your purchase. We want to arm you with information, so that you make the best choice possible for you and your future. With a little education and a lot of care a lot more people can share in this gift.
